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In a federal constitution, there are two sets of governments

federal and states- which are constitutionally allocated

exclusive as well as shared jurisdiction. For this reason, Inter-

Governmental Agencies are an essential mechanism to negotiate,

regulate and formulate common policies at least in the policy

areas of shared jurisdictions. Besides, such agencies may also be

necessary for exclusive jurisdictions for the obvious reason that

in the era of cooperative federalism, the federal government often

uses its generally larger revenues to initiate centrally sponsored

schemes of development and social policies with the consent of

state governments. Such schemes may be fully or partly funded

by the Union and implemented by the States.

Intergovernmental relations in a multi-tier governmental

system requires management with caution and sensitivity as

they involve controversial issues of constitutional intent, fiscal

relations, public policy, inter-dependence, judicial interpretations,

regional imbalances, ecological sustenance, investment and

trade etc. Partisan approaches for electoral gains by political

parties or regional interests groups can undermine the national

goals, besides distorting Centre -State relations.

In parliamentary federal systems, the responsibility for

conducting Inter-Governmental relations generally falls on the

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executive organs of the two levels of the governments. This can

be explained by referring to three factors.

1. The legislatures at the two levels cannot interact

because of their sheer aggregate size even if it were

provided for in the constitution.

2. The federal second chambers in parliamentary systems

cannot possibly take upon this responsibility on them

because the federal government is collectively

responsible to the Lok Sabha.

3. The cabinet emerges as the executive committee of the

first chamber of the Parliament to act on its behalf and

its position is buttressed by party discipline in that

house.

The Constitution makers were aware of the need for

various Inter-Governmental Forums because at that time the

idea of cooperative federalism was prevalent. Thus they

incorporated article 263 in the Constitution. Following this

Article, a regular inter-State Council was set up n 1990. The

other important inter-governmental forums in India are Planning

Commission and National Development Council

The Inter-Governmental Agencies in India are structured

with an objective to resolve the disputes between union and

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states without the involvement of Courts. Judicial proceedings

take a long time, involve heavy costs and often leads to uncertain

results at the cost of efficiency and accountability in governance.

Direct action disrupts the development process and distorts good

relations There is a need to improve the functioning of existing

institutions, if intergovernmental relations have to be organized

in the spirit of co-operative federalism.

In India there is the fragmentation of political parties and

the emergence of alliance/coalition government both at the

Centre and in the States- and the coalitions are of different

types. There are some which are opportunistic and naturally

incoherent bringing instability in government. There are others

in which some groups in the coalition do not participate in

government but extend outside support in Parliament/

Legislature. There are still others who negotiate coalition pacts

before or after the elections based on common agenda and

mutual obligations.

Coalition governments invariably result in dissatisfaction

and acrimony in varying degrees among the partners and cause

delay in governmental decision-making. It foments problems in

reconciling federal principles with the requirements of

parliamentary system of governance, thereby create difficulties in

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constitutional governance. Before 1977, the Prime Minister

dominated Parliament through single party majority. But after

1990s it went to the other extreme, where regional parties

assumed disproportionate clout both in the government and in

Parliament. The casualty in this phenomenon has been the

cabinet cohesion. The authority of the Prime Minister and the

collective responsibility of the Cabinet to Parliament are also

diluted in the compromises made tending to make the

Government weak. It is strange that while the Constitution

prescribed for a strong Centre, in practice, the Centre has

become weak in certain matters of policy making as a result of

coalition politics.

The question to be asked is how these developments in the

polity have impacted on Centre-State relations and the quality of

governance. Do coalition politics undermine the national goals

and marginalize certain states as against others? When

consultation and co-ordination are essential for federal

governance, does the change in the polity and the economy lead

to confrontation, conflict and delay in decision making? More

importantly, how do the available forums of consultation

respond to the new challenges in federal governance and with

what results?

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The Inter-Governmental Agencies like Planning Commission,

National Development Council and Inter-State Council have been

created for promoting existing institutional mechanisms for

cooperation and conflict resolution between the Union and

States, as also between States interse. It takes note of the

criticisms about the present state of affairs, and analyses which

suggestions for reform appear most promising for better relations

between the Centre and the States.

The working of these Inter-Governmental Agencies bears

testimony to the fact that many a times the consultation turns

out to be only a formal consultation within the existing

institutional arrangements. These existing institutional

arrangements are generally used only to the benefit of the Union

Government as the views of State governments are not fully

taken into consideration. Though Article 263 empowers the

Union Government in the public interest to establish a council,

"the Union Government has established an Inter-State Council

in1988, but it met for the first time in 1996 after a gap of eight

years. Many issues concerning the relations between the Union

and State Governments and between the States can be referred

to the Inter-State Council for effective policy decision and

implementation.

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With regard to the National Development Council, it is

suggested that National Development Council has to be

developed as an effective instrument for Centre- State

coordination on all financial and development issues. By lacking

a constitutional status, meetings of the National Development

Council are not held on regular basis. For instance, the Ninth

Plan proposal prepared by the Planning Commission in 1997

was approved by the National Development Council only in 1999

after a delay of two years. Since 1952, till date it had met 55

times with an average of 0.9 percent per year. Frequent meetings

of NDC are required to be held (at least two meetings in a year)

for detailed consultations with the States.

With respect to the Planning Commission, it is observed

that the Planning Commission should act as an executive wing

of the National Development Council with statutory and

constitutional backing. Unlike the present composition of the

Planning Commission where members and experts are all

nominated by the Union Government, there should be adequate

representation of the States - both as members as well as

experts - with at least one from each region with periodic

rotation among the States in a region. The restructured Planning

Commission must not act primarily as a representative of the

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Union Government as it is now, but should also represent the

interests of the States. Moreover, there is no provision of

Planning Commission in Constitution of India. This provision

needs to be made by way of amendment to the Constitution.

Moving towards a transformed role, the Planning Commission

should concerned itself with the building of a long-term strategic

vision of the future and decide on priorities of the Nation. Its

main role should involve working out sectoral targets and

providing promotional stimuli to the economy to move and grow

in the desired direction. In the new milieu of economic

restructuring, the Planning Commission should concentrate on

strategies of employment generation, anti-poverty programmes,

social development and ensuring balance within the

infrastructure. The Planning Commission should also focus on

the maximum possible utilization of resources, rather than

aiming at increase in the allocations. Until now, the size of the

plan was of great concern. Now, the focus will have to be on the

efficiency of the utilizations of the allocations being made.

It is further stated that the decisions of the inter-State

Council therefore have to be made binding on the Union

Government through appropriate constitutional amendment. The

schedule of the Council has to be made mandatory and all States

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should be adequately represented. This body needs to be

substantially strengthened and activated as the key player in

inter-governmental relations. It must meet at least thrice a year

on an agenda evolved after proper consultation with States.

There must be a method to co-ordinate the functioning of the

Inter-State Council with that of the National Development

Council. This co=ordination will have two desirable effects.

First, it would avoid unnecessary bifurcation of the apex

inter-governmental body with the same membership in the

National Development Council and the Inter-State Council. The

division of work between the two in terms of economic and

political policy-making is apparently made on the reasoning that

it would prevent politicization of the planning process. In any

case, politics cannot really be separated from economic decision-

making. In fact, a certain degree of political contestation is

necessary to inject a dose of democratic bargaining to remove

the distortions of an imposed consensus that may really conceal

an unjust political order.

Secondly, this artificial separation also results in narrow

construction of policy areas not only along economic and

political issues but also in the proliferation of a very large

number of national councils for a variety of policy areas that lack

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integrated high power status to lend weight to their

recommendations. These national councils may still be

continued as bodies of technocrats whose recommendations

must be considered by a top-level inter-governmental agency

representing the executive heads of the two orders of

government.

It is also required that the Inter-State Council must be

empowered to follow up the implementation of its decisions for

which appropriate statutory provisions should be made. The

Government should evolve an appropriate scheme to utilize the

full potential of Inter-State Council in harmonizing Centre-State

relations which has become urgent in the changed

circumstances. Issues of governance must as far as possible be

sorted through the political and administrative processes rather

than pushed to long-drawn adjudication in Court. Inter-State

Council appears to be most viable, promising constitutional

mechanism to be developed for the purpose provided it is

properly restructured and duly empowered. Once the Inter-Sate

Council is made a vibrant, negotiating forum for policy

development and conflict resolution, the Government may

consider the functions of the National Development Council also

be transferred to the Inter-State Council

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The institutional bodies through which the issues related

to Centre-State relations are supposed to be discussed and

resolved are the Inter-State Council, the National Development

Council, the Planning Commission and the Finance Commission.

However, the past record shows that neither have these

bodies given effective representation to the State's views in terms

of both composition and Terms of Reference/Agenda, nor have

their decisions succeeded in providing a fair deal to the States.

In fact, these bodies have functioned almost as an extension of

the Union Government or its agencies, with an implied bias in

favour of concentrating power at the Centre.

They are often created through an executive or

administrative order of the Union Government and therefore

perceive themselves as Union Government appointees and

representatives. This needs to be changed and the institutional

arrangements developed into representative and functional

bodies with appropriate statutory backing.

Similarly the working of Inter-State Council is not

satisfactory. The functioning of the Inter-State Council, which

had gathered some momentum in the earlier years, has once

again lost steam. Despite the Council arriving at several

decisions regarding implementation of the Sarkaria

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Commission's recommendations, the Union Government has not

implemented them. The decisions of the Inter-State Council

therefore have to be made binding on the Union Government,

through appropriate Constitutional amendment. All major non-

financial issues involving Centre-State relations have to be

discussed and decided by the inter-State Council. The schedule

of meetings of the Council as well as the Standing Committee of

the Council has to be made mandatory. The Secretariat of the

Inter-State Council should have better representation from the

States.

In the changing future context, the importance of Inter-

Governmental institutions in India has gradually been increasing

and this process is likely to not only continue but accelerate in

the years to come. They proved to be necessary and integral part

of the Indian federal structure. These agencies play an

indispensable role in tune with the spirit of co-operative

federalism requiring proper understanding and mutual

confidence and resolution of problems of common interest

expeditiously. Their utility is, thus, established beyond doubt.